Brent crude oil traded above $95 for a spell on Monday before easing back to the mid $94s as uncertainty reigns over Russia’s intentions in the Ukraine.
West Texas Intermediate flirted briefly with $94 but also moved down slightly later in the day. The softening followed sharp increases in the benchmark crudes on Friday when oil prices rose by more than 4%.
Tension surrounding Russian intentions is fuelling uncertainty, particularly in Europe, where Ukraine is a major route for oil and gas into Europe. Russian gas, meanwhile, is an essential energy supply for Europe, particularly Germany, the EU’s largest economy, meeting over half of the country’s demand.
Some analysts are predicting that oil could break through $100 later this week but financial services firm J P Morgan has gone further. The oil price could ‘easily’ go through $120, the firm has been reported as saying.
The German Chancellor, Olaf Scholz, is due to meet Russian President Vladimir Putin in Moscow on Tuesday. The Nord Stream 2 pipeline, an essential gas supply conduit running under the Baltic Sea from Russia to Germany, is on the agenda. The Moscow meeting follows a visit by the German Chancellor to Ukraine on Monday.
Meanwhile reports last week that Japan will divert some LNG import cargoes have been clarified. Japan’s Ministry of Economy, Trade and Industry (METI) has indicated that provided Japan has sufficient supplies itself, it will cooperate in diverting some gas to Europe as much as possible. However, no cargoes have yet been diverted and cold weather forecast in Japan is likely to increase domestic demand over the balance of February.
(seatrade-maritime.com, Feb 15, 2022)
